Systems and methods for offering and servicing hedge funds

ABSTRACT

A family of hedge funds, serving as “feeder funds” into underlying single-manager hedge funds, formed to provide smaller investors with the ability to allocate and reallocate assets among alternative strategies, and this basic structure combining interrelated systems and methods for offering, redeeming, exchanging, valuing, reporting and servicing the same is a new approach. The system and methods described herein provide investors having less than ultra-high net worth portfolios with access to hedge funds and the potential valuable diversification to an overall portfolio, and the ability to customize their portfolio of hedge funds to their individual needs and adjust such portfolio over time as seen fit in light of changing financial needs and market conditions. This invention gives a wide range of investors access to hedge funds, creating economic value using a new source of stable investor capital for hedge fund managers, a value shared with investors through reduced costs.

BACKGROUND OF THE INVENTION

This invention relates to hedge funds and systems and methods foroffering and servicing the same. More particularly, this inventioncreates a low cost method for providing access to multiple hedge funds,as well as to the ability to efficiently allocate and reallocate capitalamong such funds, and in each case, to do so both more frequently and insmaller minimum amounts than would be possible investing directly inthese hedge funds as opposed to doing so through this invention.

Hedge funds are privately-offered, highly specialized investmentvehicles, to date generally available only to very high net worthindividuals and institutional investors. Because they are privatelyoffered, hedge funds are not subject to most of the portfolio and othersubstantive restrictions imposed on “investment companies” and “mutualfunds” (publicly-offered investment funds which must, in the UnitedStates, be registered under the Investment Company Act of 1940). Hedgefunds have the flexibility to trade a broad array of financialinstruments in global markets—including taking both long and shortpositions as well as trading at a wide range of different leveragefactors in all manner of securities, derivatives as well as other liquidand illiquid assets.

Hedge funds implement numerous different investment strategies. Amongthe most common of these strategies are: convertible arbitrage,distressed securities, equity arbitrage, directional equity(long/short), event driven, fixed income arbitrage, global macro andmarket neutral. There is no material limitation on the strategies whichhedge funds may implement.

Because the “skill-based” strategies which hedge funds implement oftenhave as much profit potential in declining as in rising markets, hedgefunds are generally perceived to offer a potentially valuable element ofdiversification for a traditional portfolio of “long-only” stock andbond holdings (often concentrated in a single country's economy, whereashedge funds are able to access global markets). Modern portfolio theoryhas established the long-term benefits of including “non-correlatedasset classes”—as hedge funds are generally classified—in an overallportfolio. However, broadly diversified, individually tailoredmulti-hedge fund portfolios have to date been inaccessible to all butthe extraordinarily wealthy because of the high minimum investmentrequired, the difficulty of obtaining access to many of the mostsuccessful funds and the inability to exchange among unaffiliated funds.

Not only are hedge funds' minimum investments typically very large, butalso such investments are typically illiquid. Hedge funds impose severelimitations on investors' ability to make as well as redeem investments(redemptions often being the only meaningful source of hedge fundinvestor liquidity as there is no market for many hedge fund interests).Redemptions generally are permitted as infrequently as quarterly,semi-annually or even only annually. Numerous funds impose even morerestrictive redemption terms (e.g., a 2 to 3 year required commitment).Moreover, in order to redeem, advance notification, generally rangingfrom 30 to 90 days, is commonly required. Once a redemption has beenpermitted, many hedge funds do not pay the first installment ofredemption proceeds until 45-60 days after the effective date ofredemption, and in the case of a complete redemption by an investor itis not uncommon for a hedge fund to withhold up to 10% of the estimatedvalue of the redemption proceeds until completion of the fund's annualaudit (which may be more than a year after the redemption date). Theilliquidity of hedge fund investments serves as a material entry barrierto smaller investors as, due to such illiquidity, they must have noneed, contingent or otherwise, for the substantial amounts which theymust invest in a hedge fund. Such illiquidity also increases thedifficulty of participating in individual tailored, diversifiedportfolios of hedge funds.

Not only has the large minimum investment size and illiquidity of hedgefunds made it difficult for most investors to participate in diversifiedportfolios of hedge funds selected individually by such investors, butalso the material differences between hedge funds in features unrelatedto the strategy implemented (e.g., redemption provisions, minimumsubscriptions, tax reporting, etc.) have made allocating andreallocating among different funds the province only of specialized“funds of funds” managers capable of evaluating these differences anddeveloping combination portfolios with overall structural attributesconsistent with their portfolio objectives. These managers addsignificantly to the overall economic costs to investors as well asrestricting or eliminating “investment transparency” as disclosure ofthe hedge funds included in the portfolios which they develop toinvestors would compromise the confidentiality of the managers' assetallocation strategies.

A more fundamental disadvantage of “funds of funds” managers is that“funds of funds” managers cannot select hedge fund portfolios with anysingle investor in mind, as opposed to the generalized portfolioobjectives of the aggregate group of investors in their “funds offunds.” However, different investors have very different particularobjectives and risk tolerance levels as well as different coreportfolios which they are seeking to diversify.

Another impediment to individually tailored multi-hedge fund portfolioshas been that acceptance into a hedge fund into which an investor wishedto reallocate capital has heretofore by no means been assured. Thedelays in obtaining such acceptance (and, in certain cases, theinability to do so) are disruptive of an asset allocation strategy.

The administrative entry barriers to smaller investors participating indiversified hedge fund portfolios have also been high. Privateplacements in general usually have complicated and burdensomesubscription documents which must be signed by all investors.Privately-placed hedge funds have particularly complicated andburdensome subscription documents because investors must, for regulatorypurposes, provide the sponsor with a number of representations andwarranties peculiar to private investment funds in order to verify thesubscriber's eligibility and allow them to subscribe. Completing andprocessing the necessary subscription documentation makes hedge fundinvesting procedurally difficult—typically the province of institutionsand wealthy family offices with the resources to employ staff to performthis function.

SUMMARY OF THE INVENTION

It is an object of this invention to provide a family of funds fungiblein structure but accessing underlying hedge funds with diverse strategytypes. These funds have enhanced investor liquidity, transparency as tothe identity of the underlying portfolio managers, flexible exchangerights, as well as simplified documentation and accounting, valuationand reporting systems conducive to allowing smaller investors to act astheir own asset allocators. Additionally, it is an object of thisinvention to provide eligible clients access to a program of funds withminimum investments substantially below what would be required for adirect investment into a single underlying hedge fund. This inventionsubstantially eliminates the possibility of delays in obtainingacceptance into a hedge fund by providing that acceptance into theprogram of this invention constitutes acceptance into each of the feederfunds included in the program, provided capacity is available.

It should be noted that in this description and in the claims whichfollow, if a fund within the program of the invention is described ashaving a particular characteristic that is greater or less than acomparable characteristic of a fund outside the program (e.g., a shorterredemption delay or a lower minimum investment), it is intended that thecomparison be made between funds that are as substantially alike aspossible. Thus, the second fund, to which a comparison is being madewith regard to one characteristic of a first fund within the program ofthe invention, should be considered to be a fund whose characteristics,other than the characteristic being compared, are substantiallyidentical to those same characteristics of the first fund, bearing inmind that by “substantially identical” is meant that a very small numberof those characteristics (e.g., at most one or two characteristics), inaddition to the characteristic being compared, may differ as between thefirst and second funds without rendering the first and second fundsincomparable. Similarly, even though the second fund may be availableboth within the program of the invention and outside the program of theinvention (and may even be the same as the first fund except for beingoutside the program), when a comparison is made the comparison is to thesecond fund only as it exists outside the program.

This invention provides the typical investor with the opportunity todiversify his or her portfolio into the hedge fund sector whileindividually selecting managers and strategies (with the aid of expertadvice from the financial advisors associated with the program ifdesired) and customizing his or her investment to specific portfolioneeds and objectives rather than investing in a multi-manager fund inwhich the investors relinquish all control over—or even knowledge of—themanagers included in the portfolio as well as any ability to customizethe portfolio to their individual needs. Because this invention makesavailable a program of single-manager hedge funds in accessibleinvestment amounts, participants for the first time are able personallyto customize and dynamically manage a portfolio of hedge fundsrepresenting an investment of a size feasibly and prudently includablein the overall portfolios of investors other than the ultra-wealthy.Through the frequent subscription and redemption opportunities madeavailable through the invention, the fungibility of the program funds,the acceptance, provided capacity exists, of all program participantsinto each of the feeder funds into which they may wish to exchange andthe development of accounting, valuation, reporting and documentationsystems designed to facilitate exchanges among and redemptions from thefeeder funds included in the program, the invention permits a vastlyexpanded investor base to have access to diversified alternativeinvestment strategies.

In addition to permitting investors themselves to customize theirportfolios, the invention gives added flexibility to professional “fundof funds” managers in operating their products by permitting redemptionsand exchanges among hedge funds in much smaller denominations than wouldotherwise be possible. This facilitates the use of the program in avariety of hybrid investment products—for example, variable annuities—inwhich tax or other regulations restrict the ability of investorsthemselves to control the selection of the underlying funds.

In some embodiments, this invention creates a low cost method forproviding access to multiple hedge funds, as well as to the ability toallocate and reallocate capital among such funds, to an extended clientbase not to date able to meet the minimum investment requirements formost individual hedge funds. In addition, some embodiments of thisinvention permit these small minimum investments, allocations andreallocations to be redeemed and exchanged with significantly moreliquidity than is possible in most hedge fund structures. Thecombination of smaller minimums and enhanced liquidity provides aqualitatively more flexible platform through which a widely expandedgroup of investors can access alternative investment strategies. Theenhanced liquidity, in accordance with some embodiments of thisinvention, is provided by efficiently allocating and reallocating assetsamong different hedge funds for cash flow management purposes (otherwisethe reallocation of capital to a new hedge fund strategy would bedelayed pending receipt of the related redemption proceeds, although theparticipation of such capital in the performance of the hedge fund fromwhich the redemption is made ceases as of the effective date ofredemption, generally 45-60 days before the first redemption proceedsare received).

The present invention facilitates admitting retail investors into thehedge fund field. Not only is this a source of new capital for hedgefund sponsors, but also a source of more stable capital to suchsponsors, as the retail investor pool, which includes multipleindividual decision-makers, can be expected in the aggregate to turnover much more slowly than capital invested by the limited number oflarge institutional investors. The latter will typically redeem theirentire investment of many millions of dollars as a single investmentdecision. This exposes the hedge fund sponsor to the risk of having tomake material portfolio adjustments as a result of decisions reached bya single or limited number of decision makers (and perhaps due tofactors entirely unrelated to the hedge fund itself). Not only does theinvention's overall investment in any given hedge fund provide thestability created by diversifying investment decisions across numeroussmall investors, but also the invention permits the netting ofredemptions and subscriptions, further increasing capital stability.Stable capital not only reduces the risk of forced hedge fundliquidations at disadvantageous prices in order to meet largeredemptions, but also has economic value to the hedge fund sponsors,providing a stable base on which percentage-of-assets fees arecalculated as well as an assured time period over which capital isavailable to generate profits and performance-based compensation. Thisvalue, in turn, is shared by the hedge fund sponsors in a variety ofways—fee rebates, improved redemption terms, accelerated reporting,etc.), making the program both more efficient and more accessible toinvestors.

In accordance with some embodiments of this invention, eligible clientsare provided access to a program of multiple hedge funds with a minimuminvestment into the overall program (providing exposure to a number ofdifferent hedge funds) substantially less than that typically requiredto invest in a single hedge fund. In accordance with this invention,investors are provided with the capability to individually customizetheir hedge fund portfolios and are provided with enhanced investorliquidity and the flexibility to exchange among funds without need ofobtaining hedge fund approval for each individual exchange. In someembodiments, such flexibility is enhanced by facilitating redemption andsubscription cash flows as well as by maintaining uniformity in thestructure and business terms (i.e., fungibility other than in respect ofstrategies employed) of the various Feeder Funds included in theprogram. Participation in the program is facilitated by reducingsubscription documentation as well as simplifying the accounting andcustomer securities statement reporting while providing investors with areporting package well-adapted to frequent exchanges among the feederfunds included in the program. This reporting feature is particularlyimportant to U.S. taxable investors who must consolidate the taxinformation received from each of the feeder funds in which theyparticipate during a fiscal year.

Combining low minimum investments, structural fungibility among theprogram's feeder funds, transparency of each feeder fund in such aportfolio contrasted with either no or limited transparency in a fund offund structure, an efficient exchange and redemption process anduser-friendly reporting—and all at a reasonable cost made possible bythe economic value created by this invention for the hedge fundsponsors, of which they rebate a portion to the program—makes itpossible for smaller investors to be able to customize their ownmulti-manager portfolios in the alternative investment strategy field.

A fundamental mechanism of the invention is the use of feeder funds toaggregate individual investments so that the underlying hedge funds indealing with each feeder fund as a single investor effectively givegreater investment flexibility to the investors in the feeder fund(e.g., the feeder funds can permit small minimum investments becausethrough aggregating such investments the feeder funds can meet theunderlying hedge funds' minimums, and the feeder funds can permit morefrequent redemptions and exchanges than the underlying hedge fundsbecause redemptions or exchanges from the feeder funds may be offset bysubscriptions so that such redemptions do not result in correspondingredemptions from the underlying hedge funds). The invention hasmaterially enhanced the flexibility of the feeder fund structure bycreating structural fungibility, administrative efficiency (e.g.,reduced administrative barriers) and enhanced liquidity for investorsparticipating not in a single feeder fund but in a family of feederfunds. Creating and enhancing the potential advantages made possible bya family of feeder funds is a basic embodiment of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

The above and other objects and advantages of the invention will beapparent upon consideration of the following detailed description, takenin conjunction with the accompanying drawings, in which like referencecharacters refer to like parts throughout, and in which:

FIG. 1 is a flow chart illustrating a preferred embodiment of the methodaccording to this invention;

FIG. 2 is a flow chart illustrating a preferred embodiment of the methodaccording to this invention;

FIG. 3 is a flow chart illustrating a preferred embodiment of thefinancial advisor approval step 201 of the method illustrated in FIG. 2;

FIG. 4 is a flow chart illustrating a preferred embodiment of the clientapproval step 202 of the method illustrated in FIG. 2;

FIG. 5 is a flow chart illustrating another preferred embodiment of theclient approval step 202 of the method illustrated in FIG. 2;

FIG. 6 is a flow chart illustrating a preferred embodiment of the methodaccording to this invention;

FIG. 7 is a flow chart illustrating another preferred embodiment of theclient approval step 202 of the method illustrated in FIG. 2;

FIG. 8 is a flow chart illustrating a preferred embodiment of thematerials request step 203 of the method illustrated in FIG. 2;

FIG. 9 is a flow chart illustrating a preferred embodiment of theprocess the schedule returned step 204 of the method illustrated in FIG.2;

FIG. 10 is a flow chart illustrating a preferred embodiment of a methodaccording to this invention for adding a new feeder fund;

FIG. 11 is a tabular compilation illustrating a preferred embodiment ofthe method according to this invention;

FIG. 12 is illustrative of an exemplary system for implementing themethod in accordance with some embodiments of the present invention;

FIG. 13 is an illustration of a preferred exemplary system forimplementing the method according to the present invention;

FIG. 14 is a cross-sectional view of a magnetic data storage mediumencoded with a set of machine-executable instructions for performing themethod according to the present invention; and

FIG. 15 is a cross-sectional view of an optically readable data storagemedium encoded with a set of machine executable instructions forperforming the method according to the present invention.

DETAILED DESCRIPTION OF THE INVENTION

This invention provides a way for investors to access hedge fundscombining a number of features not previously combined into any “familyof hedge funds” programs, such as: (1) dramatically reduced minimuminvestments; (2) more frequently available purchases and redemptions;(3) greater liquidity in receiving redemption and exchange proceeds; (4)exchangeability among the various hedge funds included in the program;(5) a money-market feeder fund option; (6) streamlined investment,exchange and redemption documentation; (7) an on-line web-based systemfor qualifying and registering eligible clients; (8) consolidatedfinancial valuation and tax reporting; (9) consistent fees and fungiblebusiness terms within a competitive range; (10) account statementtreatment comparable to that applicable to any exchange-traded stock;(11) aggregation of related taxable and tax exempt accounts fortreatment as a consolidated investor; and (12) different share classeswhich may be at the choice of some categories of investors withdifferent pricing structures. Each of these individual features has beenavailable in other feeder fund programs, but never previously have allbeen combined in a single program. The effect of such combination is toprovide a qualitatively new means of accessing alternative investmentstrategies.

The substantially increased client base and statistically more stablecapital which the program provides creates material economic value forthe hedge fund sponsor value which can, in turn, be shared withinvestors, increasing the benefits as well as the attractiveness of theprogram (further increasing the economic value of the program to thehedge fund sponsor).

In some embodiments, the financial management company sponsoring aprogram may negotiate with each hedge fund in a program's family offunds to receive a portion of their management and incentive fees. Sucharrangements may allow such management company to raise capital whilereducing marketing expenses and other fees that are normally passedthrough to investors.

In some embodiments, investors may exchange their investment in onehedge fund in the family of funds for an investment in one or more otherhedge funds within the family. In accordance with some embodiments ofthis invention, hedge funds in the family of funds may agree to providethe redemption proceeds to the financial management firm within apredetermined period materially shorter than would otherwise be the caseand established expressly so as to facilitate exchanges among programfunds (importantly, one month or less, as hedge funds typically permitsubscriptions once a month).

In some embodiments, the incremental economic value generated by theprogram makes it possible to eliminate any up-front selling commissioncharges otherwise associated with exchanging into a new feeder fund(otherwise indistinguishable from a new investment on which a sellingcommission is due).

An investor who chooses to exchange out of a feeder fund in accordancewith this invention preferably will not pay redemption or exchangecharges other than those imposed by the underlying fund in which theprogram feeder funds invest. Interests acquired in an exchangepreferably will be treated as if they have been outstanding since thedate of their initial issuance for purposes of determining ongoingcompensation due to the selling agent. This facilitates exchanges byavoiding any resulting penalty to the selling agents' financialadvisors. Otherwise, exchanging an interest preferably will be made onthe same terms as making a new subscription for such interest.

The use of the feeder fund structure for the program of funds makes itpossible to provide a number of benefits not available in the case ofdirect investments in the underlying hedge funds, including, withoutlimitation, smaller minimum investment size, netting of redemptions andsubscriptions, exchange privileges and consolidated reporting for anoverall portfolio of program feeder fund investments.

In some embodiments, exchanges preferably will be made between interestsof the same class and series in the various funds in the family offeeder funds. In some embodiments, exchanges preferably will be madewithout distinction among different classes and series of investmentinterests. In accordance with some embodiments of this invention,exchanges may be limited by a predetermined minimum amount (e.g.,$100,000) and may be limited by predetermined increments (e.g., $1,000).

When an investor exchanges between feeder funds, the exchange preferablywill be facilitated (without the need to obtain credit facilities) byreducing the time required to receive and reinvest the proceeds of thehedge fund from which an exchange is being made in the hedge fund intowhich the exchange is being made. Preferably this reduction will permitthe exchange proceeds to be reinvested no later than the beginning ofthe month following the exchange. For example, if an investor exchangesfrom Feeder Fund A to Feeder Fund B as of March 31, such investor wouldcease to participate in Feeder Fund A as of March 31, and would begin toparticipate in Feeder Fund B as of May 1. In addition, the ability ofthe feeder funds to net subscriptions and redemptions can provideenhanced liquidity, as it may not be necessary to obtain redemptionproceeds (or even redeem feeder fund investments in order to accommodatean exchange) as opposed to redirecting new feeder fund subscriptions tothe payment of redemptions or exchanges.

In some embodiments, investors may exchange from other program feederfunds into a money-market fund. A money-market feeder fund may giveinvestors in the program the option of allocating all or part of theirprogram investment to “riskless” highly liquid investments duringperiods when they wish to reduce their hedge fund exposure on an interimbasis, enhance their liquidity and/or meet program minimums in whole orin part with a lower risk investment. Exchanges out of the money-marketfeeder fund preferably will be permitted on shorter notice than from thefeeder funds included in the program. For example, investors may berequired to provide only 15 days' notice in order to exchange out of themoney-market feeder fund as of any calendar month-end. Exchanges out ofthe money-market feeder fund into other program feeder fund(s) willpreferably be effective promptly—preferably as of the beginning of theimmediately following month.

In accordance with some embodiments of the present invention, thesponsor of the family of funds preferably will introduce additionalhedge funds in the program on an ongoing basis, expanding the range ofgenerally fungible hedge funds available to program participants.

In accordance with some embodiments of this invention, “fund of funds”managers will make use of the program's flexibility to “fine tune” theirmulti-manager portfolio allocations as well as to differentially adjustsuch allocations to meet different investors' specific portfolio needsand objectives.

In accordance with some embodiments of this invention, the programsponsor may offer investors the option of individually customizing theirportfolios or having the sponsor or some third party provide assetallocation services, allocating and reallocating investor capital amongthe program funds on a discretionary basis. This latter embodiment ofthe invention permits the invention to be used as a component of variousfinancial products—such as variable annuities—in which investors areprohibited from determining the selection of the underlying hedge funds(due to tax, regulatory or other reasons). In addition, this latterembodiment could be used as a means of smaller investors obtainingcustomized asset allocation services from a “fund of funds” managerwhich maintains investment transparency and uses the economic valuecreated by the program for hedge fund sponsors to defray the cost ofsuch asset allocation services.

In accordance with some embodiments of this invention, the subscriptiondocumentation process is simplified.

In some embodiments, the initial program subscription agreements may becompleted on-line (e.g., intranet, Internet, dumb terminal, etc.) andmay be processed with an electronic signature.

Program documents, whether electronic or not, preferably need to becompleted by a subscriber only once at the time of the initialinvestment in the program. Once a subscriber completes a programsubscription document, the subscriber preferably will complete a moreabbreviated form (e.g., a purchase form, an exchange form, apurchase/exchange form, etc.) each time he or she subscribes to orexchanges into one of the funds in the family of feeder funds.(Preferably, an investor making a subsequent investment into a fund inwhich he or she is currently an investor need not submit any additionalform.) With this expedited subscription documentation process, investorspreferably will avoid completion of a much longer, complicatedsubscription agreement for each fund in which they invest, a proceduralburden which could have a material “chilling effect” upon otherwiseattempting to allocate and reallocate assets among different funds. Inaddition, the program documents would assure acceptance of exchanges(provided the fund receiving the exchange was open for investment).There would be no uncertainty, as there would be in the case of directinvestments in the underlying hedge funds, as to whether a hedge fundwould accept an exchange (the uncertainty as to whether a proposedexchange would be accepted being fundamentally disruptive of any assetallocation strategy).

The program minimum, in accordance with some embodiments of thisinvention, may be set at a reduced predetermined amount (generallysignificantly lower than the minimum of most individual hedge funds),and a further reduced predetermined minimum amount may apply forinvestment in any one program fund. The reduced minimums allow a clientwho wants access to hedge funds and the ability to take an active rolein his or her portfolio management to customize such portfolio byinvesting among a variety of hedge funds in smaller minimums. Inaddition, a number of related clients (e.g., sufficiently closelyrelated members of a family), may be able to aggregate their accounts,so that even if no one account reaches the program minimum, they maystill participate in the program if the aggregate amount in the relatedaccounts meets the program minimum. The same type of aggregation mayapply for a single client with more than one account. Both taxable andtax-exempt accounts may be aggregated for these purposes.

In some embodiments, investors may be able to have ongoing informationconcerning all available funds in the family of feeder funds throughconsolidated reporting. Investors preferably will receive a monthlystatement including the performance of each of these funds. On aperiodic basis (e.g., yearly, quarterly, monthly, etc.), the reportpreferably will contain commentary from the managers of each of theunderlying hedge funds. This information will provide investors withinformation on the basis of which to make informed investment decisionsabout allocations and reallocations of their investments among differenthedge funds included in the program.

A method and system for offering and servicing hedge funds in accordancewith the present invention may be described in conjunction with FIGS.1-13. This method and system for offering and servicing hedge fundspreferably may be used for offering and servicing other privatelyoffered alternative investment products.

FIG. 1 shows the flow of information in a method 100 for offering andservicing hedge funds. A family of funds 101 provides various feederfunds 102-106. The feeder funds preferably also include a money-marketfund 107. The feeder funds 102-106 provide investors access tounderlying hedge funds 108-112, and allow investors to invest innumerous strategies (e.g., convertible arbitrage, distressed securities,directional equity (long/short), event driven, fixed income arbitrage,market neutral, global macro, equity arbitrage, stocks, etc.) as aresult of the various strategies used by those hedge funds 108-112.

FIG. 2 shows an overview of the flow of information in a preferredembodiment of a method 200 according to this invention for offering andservicing hedge funds. At step 201, a financial advisor is approvedbased on pre-determined criteria used to establish whether the financialadvisor is qualified to sell. At step 202, the client is approved basedon criteria including minimum net worth, minimum investable net worthand income, minimum investable assets, whether the investor meets thecriteria for being a sophisticated investor, whether there is apre-existing relationship for the investor, and the period of time ofthe pre-existing relationship. The subscription materials are requestedat step 203 (via any appropriate method—e.g., intranet, Internet, dumbterminal, phone response system, etc.). The request for materials isprocessed and a schedule outlining the request is sent to a fulfillmentcenter at step 204. The method ends at step 205.

FIG. 3 is a flow chart illustrating a preferred embodiment of thefinancial advisor approval step 201 of the method illustrated in FIG. 2.At step 301, the financial advisor inputs a request for approval to sellhedge funds in accordance with this invention. At step 302, the requestfor approval and data from the human resource database 303 are preparedfor review. Based on a manager's input 305 and preferably completion ofonline training, it is determined, at step 304, whether the financialadvisor is approved. If not approved, the method proceeds to step 310and notifies the financial advisor of the rejection and the method endsat step 315. However, a manager's override 307 can divert a rejectionfrom proceeding to 310 and at 306 the rejection may be changed to anapproval. At step 308, the approval status is reviewed to determinewhether a manager's override 307 was exercised. Additionally, at step308, the sponsor's approval 309 is sought. If a rejection is noted atstep 308, the method proceeds to 310 and notifies the financial advisorof the rejection, and ends at 315. If, however, approval is noted atstep 308, the method once again seeks sponsor approval and allows asponsor's override 312 of the approval. Based on the sponsor'sacceptance or rejection of such approval, the list of approved financialadvisors is appended at step 313, and the financial advisor and managerare notified of the approval at 314. The method ends at step 315.

FIG. 4 is a flow chart illustrating a preferred embodiment of the clientapproval step 202 of the method illustrated in FIG. 2. Specifically,FIG. 4 shows the flow of information once a financial advisor isapproved as a advisor qualified to sell funds in accordance with thisinvention (as shown in FIGS. 2 and 3). The flow of information in method400 shows a process for the financial advisor to interact with clientinformation. The method begins at step 401. At step 402, the financialadvisor logs into the system with the appropriate user identificationand password or other secure access device. At step 403, the systemdetermines whether the financial advisor is approved. Data from thefinancial advisor/client store 404 is used to make this determination.If not, the method proceeds to step 405, and allows the financialadvisor to apply for approval and ends at step 406. If yes, the clientlist is displayed at step 407 (using data from the financialadvisor/client store). The financial advisor also has the ability to adda new client 408, edit a client 409, re-approve a client 410, delete aclient 411 or access mailing for a fund 412. The method ends at step413.

FIG. 5 is a flow chart illustrating another preferred embodiment of theclient approval step 202 of the method illustrated in FIG. 2.Specifically, FIG. 5 shows the flow of information in a method 500 foradding a new client. At step 501, the financial advisor chooses to add anew investor. At step 502, it is determined whether the investor is aninternational investor or U.S. investor. If the investor is aninternational investor, international information is provided at step503 including input from the financial advisor 504; however, if at step502 it is determined that the investor is a U.S. resident, the method 30proceeds to step 505 where information for U.S. investors is providedwith additional input from the financial advisor 504. The system viasteps 506, 508, 510, and 512, and with input from 504 and 513,determines suitability for particular products based on eligibility ofthe client. At step 506, it is determined whether the investor issuitable for a particular investment. If not, the method proceeds tostep 508. Otherwise, hedge fund information is provided at step 507 withinput from the financial advisor 504. At step 508, it is determinedwhether the investor has private equity/managed futures approval. Ifnot, the method proceeds to step 510. Otherwise, private equity/managedfutures information is provided at step 509 with input from thefinancial advisor 504. At step 510, it is determined whether theinvestor has approval of the exchange fund. If not, the method proceedsto step 512. Otherwise, exchange fund information is provided at step511 with input from the financial advisor 504. At step 512, a manager'sinput 513 is sought to override a calculation at steps 505-510 ofunsuitability for particular hedge funds, based on eligibility for thevarious alternative products. If the manager disapproves, the methodproceeds to issue notification of rejection 516. If the managerapproves, the method proceeds to 514 to seek approval of the sponsorwith input from the sponsor 515. If approval is not granted, the methodproceeds to step 516 and notifies the investor of rejection. If approvalis granted, the method proceeds to step 517 at which time the client isadded and the financial advisor is notified. The method ends at step518.

FIG. 6 is a flow chart illustrating the flow of information in apreferred embodiment of a method 600 for editing client information. Atstep 601, the financial advisor chooses to edit a client's profile. Atstep 602, the financial advisor edits the client information using thedata from the FC/client store database 603. At step 604, the systemdetermines whether the edited field is significant. If the edited fieldis not significant, the change is committed to the client and the methodends at step 606. If, at step 604, it is determined that the field issignificant, manager approval 607 is sought at step 607 and input isreceived from the manager 608. If approved by the manager, at step 609,sponsor approval is sought and sponsor input 610 is received. If eitherthe manager at step 607 or sponsor at step 609 rejects the edit, thefinancial advisor is notified at step 611 and the method ends at step614. If the sponsor approves the edit, the client data is changed andthe financial advisor is notified at step 612. Additionally, at step613, the change is recorded in the change history database and themethod ends at step 614.

FIG. 7 is a flow chart illustrating another preferred embodiment of theclient approval step 202 of the method illustrated in FIG. 2.Specifically, FIG. 7 illustrates the flow of data during a periodiccheck to determine which clients may need re-approval. At step 701, themethod is initiated. At step 702, the system checks all clientinformation and determines which client files maintain out-of-dateinformation. At step 703, the financial advisors representing clientswith out of date information are notified of the need for re-approval.At step 704, the client files are marked as out of approval. The methodends at step 705.

FIG. 8 is a flow chart illustrating a preferred embodiment of thematerials request step 203 of the method illustrated in FIG. 2.Specifically, FIG. 8 show the flow of the method of preparing mailingsto investors. At step 801, a mailing is prepared. At 802, the systemcompares the fund data 804 with client and financial advisor information803 to determine which financial advisors and clients are approved formailing. At 805, the system determines whether financial advisors areapproved for the mailing. If not, the system proceeds to step 806 andnotifies the financial advisor of the rejection. If approved, the systemproceeds to step 807 and determines whether the sponsor 808 has approvedthe mailing. If the sponsor has not approved the mailing, the systemproceeds to step 806 and notifies the financial advisor of therejection. Otherwise, a package number is issued at step 809. At step810, the financial advisor and/or client is added to the mailing listfor that day. At step 811, automatically feeds a fulfillment system thatdistributes documents to customers. At step 812, the financial advisoris notified that the package is sent and the method ends at step 813.

FIG. 9 is a flow chart illustrating a preferred embodiment of theprocess the schedule returned step 204 of the method illustrated in FIG.2. Specifically, FIG. 9 illustrates the flow of information that occursupon receiving a subscription 901. At step 902, the return date of thesubscription is recorded in the fund store database 903. At step 904,key data (e.g., name, account number, etc.) is verified. At step 905,the subscription is sent to the legal department where legal input 908is received. If at 906 legal rejects the subscription, comments areentered for the document 907 and the financial advisor and/or client isnotified at step 911, and the process ends at 913. If legal approves thesubscription, the financial advisor's commission is calculated at step909 and may be manually overridden 910. At 912, the commission is addedto the close document with the call amount and placement fee. Theprocess ends at step 913.

FIG. 10 is a flow chart illustrating a preferred embodiment of a method1000 according to this invention for adding a new fund. At step 1010,the sponsor chooses to add a new fund. At 1020, the sponsor must definethe fund which is stored in the fund store database 1030. At step 1040,all client files are searched for clients who may be interested ininvesting in such a fund. At step 1050, financial advisors are notifiedof the new fund and each financial advisor is provided with a list ofhis or her clients who may be interested in the fund. The method ends atstep 1060.

FIG. 11 is a tabular compilation illustrating a preferred embodiment ofthe method according to this invention. The grid provides summaryinformation from the Confidential Program Memorandum and the ProgramFund Memoranda including the investment strategy 1101, and program fundinformation 1102 (including the name 1103, sponsor fees 1104, andliquidity 1105). The table also provides portfolio fund information 1106(including program portfolio manager information 1107, minimum directinvestment amount 1108, compound annualized ROR 1109, fees 1110, andinformation about assets under management 1111).

FIG. 12 is illustrative of an exemplary system for implementing themethod in accordance with some embodiments of the present invention. Thesystem provides a infrastructure so that the methods discussed above canbe carried out by a network such as a client/server configuration, asillustrated in system 1200 of FIG. 12. The server 1210 sends andreceives data from clients 1220 including financial advisors, thesponsor, managers, and other departments in the financial managementfirm. Communication is via network lines or phone lines 1230 providingaccess via the Internet, Intranet, or any other suitable network. Theserver 1210 utilizes a database 1240 to retrieve data requested by anapplication or a client 1220, and store data that is received from theclient 1220.

FIG. 13 offers an overview of a preferred embodiment of a system 1300for implementing the method according to the invention. System 1300includes a plurality of units 1301-1315 interconnected by system bus1316. In addition, units 1301 and 1302, 1303 and 1304, and 1304 and1305, are interconnected by respective local buses 1317, 1318, 1319.

A feeder hedge fund provider unit 1301 provides more than one feederhedge fund to qualified investors and a selling unit 1302 sells thefunds to qualified investors in the program.

The exchanging unit 1303, on request of a qualified purchaser within theprogram, exchanges one fund within the program for another. In someembodiments, a money-market fund is provided within the program offunds. In such embodiments, the exchanging unit 1303 may exchange oneinvestment in one fund for an investment in the money-market fund and/ormay exchange an investment in the money-market fund for an investment inat least one other fund within the program.

The account creator 1304 creates an account for qualified purchaserseligible to participate in the program of funds. In so doing, theaccount creator 1304 may receive subscriber data using the subscriberdata receiving unit 1305. An initial subscription agreement completionunit 1306 executes an initial subscription unit that may be used toexecute future purchases and redemptions within the program withoutrequiring the same information for each future transaction. A processingunit 1307 processes subscriber transactions including exchanges andredemptions of funds within the program. The processing unit 1307utilizes subscriber data received by the receiving unit 1305 and datafrom the initial subscription agreement completion unit to processtransactions.

A minimum investment decision unit 1308 is used to determine whether aqualified purchaser meets minimum investment requirements for investmentin a fund. A compiler unit 1309 compiles tables comparing non-commonfeatures of funds within the program. Such tables may be compiled in anymedia (including electronic, digital, paper, etc.). A netting unit 1310nets subscriptions with redemptions, and an aggregation unit 1315aggregates related accounts.

A printer 1314 prints, among other things, reports providing performancedata. A CRT 1311 is used to display data that may also be printed by theprinter 1314. Data may be inputted into the system using a keyboard 1312or any input device including scanners, touch-screen, modems, networklines, etc. A storage device 1313 maintains investor data and softwareimplementing the methods of this invention.

FIG. 14 presents a cross section of a magnetic data storage medium 1400which can be encoded with a machine executable program that can becarried out by systems such as system 1100 of FIG. 11 and system 1200 ofFIG. 12. Medium 1400 can be floppy diskette or hard disk, having asuitable substrate 1401, which may be conventional, and a suitablecoating 1402, which may be conventional, on one or both sides,containing magnetic domains (not visible) whose polarity or orientationcan be altered magnetically. Medium 1400 may also have an opening (notshown) for receiving the spindle of a disk drive or other data storagedevice.

The magnetic domains of coating 1402 of medium 1400 are polarized ororiented so as to encode, in manner which may be conventional, amachine-executable program such as that described above in connectionwith FIGS. 1-10, for execution by systems such as system 1100 of FIG. 11and system 1200 of FIG. 12.

FIG. 15 shows a cross section of an optically-readable data storagemedium 1500 which also can be encoded with such a machine-executableprogram, which can be carried out by systems such as system 1100 of FIG.11 and system 1200 of FIG. 12. Medium 1500 can be a conventional compactdisk read only memory (CD-ROM) or digital video disk read only memory(DVD-ROM) or a rewriteable medium such as a CD-R, CD-RW, DVD-R, DVD-RWor DVD-RAM or a magneto-optical disk which is optically readable andmagneto-optically rewriteable. Medium 1500 preferably has a suitablesubstrate 1501, which may be conventional, and a suitable coating 1502,which may be conventional, usually on one or both sides of substrate1501.

In the case of a CD-based or DVD-based medium, as is well known, coating1502 is reflective and is impressed with a plurality of pits 1503,arranged on one or more lasers, to encode the machine-executableprogram. The arrangement of pits is read by reflecting laser light offthe surface of coating 1502. A protective coating 1504, which preferablyis substantially transparent, is provided on top of coating 1502.

In the case of magneto-optical disk, as is well known, coating 1502 hasno pits 1503, but has a plurality of magnetic domains whose polarity ororientation can be changed magnetically when heated above a certaintemperature, as by a laser (not shown). The orientation of the domainscan be read by measuring the polarization of laser light reflected fromcoating 1502. The arrangement of the domains encodes the program asdescribed above.

Thus, it is seen that the present invention provides low minimuminvestments, exchange rights among funds with fungible business terms,prompt redemption and exchange proceeds availability, and transparencyof each feeder fund in such a portfolio contrasted with either no orlimited transparency in a fund of funds structure. A family of fundsoffering a range of strategy alternatives, together with innovativesystems and methods for offering and servicing clients investing in thesame, provides many investors, whose financial resources have to daterestricted their ability to invest in any single hedge fund with accessto a dynamically managed portfolio of funds (which invest substantiallyall their capital in hedge funds). One skilled in the art willappreciate that the present invention can be practiced by other than thedescribed embodiments, which are presented for purposes of illustrationand not of limitation.

1. A computerized method for offering a program of hedge funds, saidmethod comprising: providing, using a processor coupled to anon-transitory media, a plurality of single-manager feeder hedge fundssponsored by a financial company as part of said program using a feederhedge fund provider unit, each of said feeder hedge funds having avalue, wherein: at least one of said feeder hedge funds sponsored by thefinancial company provides access to an underlying hedge fund withoutapproval from the underlying hedge fund, the underlying hedge fundhaving the capability to be illiquid on a daily basis; the at least oneof said feeder hedge funds has a minimum investment requirement that isless than a minimum investment requirement associated with theunderlying hedge fund; and the at least one of said feeder hedge fundshaving a redemption term, which defines a required minimum period oftime to elapse before an investment in the at least one of said feederhedge funds is eligible for redemption, that is shorter than aredemption term associated with the underlying hedge fund, theredemption term associated with the underlying hedge fund defining arequired minimum period of time to elapse before an investment in theunderlying hedge fund is eligible for redemption; selling said at leastone of said feeder hedge funds from the financial company to a qualifiedpurchaser using a selling unit; recording, using a processor coupled toa non-transitory media, said selling of said at least one of said feederhedge funds to an account of the qualified purchaser; on request by saidpurchaser to the financial company, exchanging, using a processorcoupled to a non-transitory media, said at least one of said feederhedge funds with the financial company for at least one other feederhedge fund within said program using the exchanging unit, wherein theexchanging is limited to a predetermined minimum amount and limited bypredetermined increments; aggregating, using a processor coupled to anon-transitory media, the account with at least one other relatedaccount to compute an aggregated total; and determining, using aprocessor coupled to a non-transitory media, whether the aggregatedtotal at least equals a predetermined minimum investment threshold, theminimum investment threshold being defined by an account manager.
 2. Themethod of claim 1, wherein said exchanging comprises calculating arespective exchange value for said at least one of said feeder hedgefunds and for said at least one other feeder hedge fund.
 3. The methodof claim 1, wherein said providing a plurality of feeder hedge fundscomprises providing at least one money market fund.
 4. The method ofclaim 1, further comprising: opening a subscriber account, said openingincluding: receiving subscriber data, and completing an initialsubscription agreement; and processing subscriber transactions includinginvestments in multiple ones of said plurality of hedge funds, saidprocessing including using said subscriber data from said initialsubscription agreement for each of said investments.
 5. The method ofclaim 4, wherein said processing comprises executing a transaction form.6. The method of claim 5, wherein said executing a transaction formcomprises executing an abbreviated purchase form.
 7. The method of claim5, wherein said executing a transaction form comprises executing anabbreviated exchange form.
 8. The method of claim 5, wherein saidexecuting a transaction form comprises executing an abbreviatedpurchase/exchange form.
 9. The method of claim 1, further comprisingpreparing a consolidated report, said report providing performance dataon more than one of said feeder funds.
 10. The method of claim 9,wherein said preparing a consolidated report comprises preparing aperiodic statement.
 11. The method of claim 1, wherein said providingcomprises providing said feeder funds, each of said feeder hedge fundshaving redemption features substantially similar to each other of saidfeeder hedge funds.
 12. The method of claim 1 wherein said exchangingcomprises moving investments among said feeder hedge funds, withoutregard to a predetermined date relating to any of said feeder hedgefunds.
 13. The method of claim 1, wherein said providing comprisesestablishing for each said feeder hedge fund a minimum investment amountlower than a minimum investment amount for a hedge fund that (a) isoutside said program and (b) has characteristics other than said minimuminvestment amount that are substantially identical to saidcharacteristics.
 14. The method of claim 1, further comprisingprocessing an initial program subscription for each account, saidinitial program subscription comprising collecting data for use ininvesting in any of said plurality of feeder hedge funds.
 15. The methodof claim 1, wherein said providing comprises providing more than oneshare class in at least one said feeder hedge fund.
 16. The method ofclaim 15, wherein said providing more than one share class in at leastone said feeder hedge fund comprises providing more than one series inat least one of said more than one share class.
 17. The method of claim16, wherein said providing more than one series in at least one of saidmore than one share class comprises providing more than one series ineach of said more than one share class.
 18. The method of claim 15,wherein said providing more than one share class in at least one saidfeeder hedge fund comprises providing more than one share class in eachof said feeder hedge funds.
 19. The method of claim 18, wherein saidproviding more than one share class in each of said feeder hedge fundscomprises providing more than one series in at least one of said morethan one share class.
 20. The method of claim 19, wherein said providingmore than one series in at least one of said more than one share classcomprises providing more than one series in each of said more than oneshare class.
 21. The method of claim 1, wherein said providing comprisesproviding more than one series in at least one said feeder hedge fund.22. The method of claim 21, wherein said providing more than one seriesin at least one said feeder hedge fund comprises providing more than oneseries in each of said feeder hedge funds.
 23. The method of claim 1,wherein said exchanging comprises providing an exchange after anexchange delay that is shorter than a redemption delay in a hedge fundthat (a) is outside said program and (b) has characteristics other thansaid redemption delay that are substantially identical to saidcharacteristics of said feeder hedge fund.
 24. The method of claim 1,wherein said providing a plurality of feeder hedge funds comprisesproviding a plurality of feeder hedge funds using multiple differentinvestment strategies.
 25. The method of claim 1, wherein said providinga plurality of feeder hedge funds comprises providing a plurality offeeder hedge funds with like rules.
 26. The method of claim 25, whereinsaid providing a plurality of feeder hedge funds with like rulescomprises providing a plurality of feeder hedge funds with at least oneof: (a) like redemption rules; (b) like subscription rules; (c) likeshared classes; (d) like reporting rules; (e) like customer accountreporting; and (f) like customer account record-keeping.
 27. The methodof claim 25, further comprising preparing a tabular compilation for saidplurality of hedge funds.
 28. The method of claim 27, wherein saidpreparing comprises comparing features of more than one of saidplurality of hedge funds.
 29. The method of claim 1, wherein saidselling a feeder hedge fund from the financial company to a qualifiedpurchaser comprises utilizing an on-line offering qualification system.30. The method of claim 29, wherein said utilizing an on-line offeringqualification system comprises providing a financial advisor with saidsystem.
 31. The method of claim 29, wherein said utilizing an on-lineoffering qualification system comprises determining whether a potentialinvestor meets predetermined qualification criteria.
 32. The method ofclaim 1, wherein said exchanging comprises processing full payment ofredemption proceeds of said at least one of said feeder hedge fundsafter a redemption delay shorter than a redemption delay for a hedgefund that (a) is outside said program and (b) has characteristics otherthan said redemption delay that are substantially identical to saidcharacteristics of said feeder hedge funds.
 33. The method of claim 1,further comprising netting subscriptions with redemptions, includingexchanges, of feeder hedge funds by said purchaser and at least oneadditional purchaser.
 34. A system for offering a program of hedgefunds, said system comprising: a feeder hedge fund provider operable toprovide a plurality of single-manager feeder hedge funds sponsored by afinancial company as part of said program, each of said feeder hedgefunds having a value, wherein: at least one of said feeder hedge fundssponsored by the financial company provides access to an underlyinghedge fund without approval from the underlying hedge fund, theunderlying hedge fund having the capability to be illiquid on a dailybasis; the at least one of said feeder hedge funds has a minimuminvestment requirement that is less than a minimum investmentrequirement associated with the underlying hedge fund; and the at leastone of said feeder hedge funds having a redemption term, which defines arequired minimum period of time to elapse before an investment in the atleast one of said feeder hedge funds is eligible for redemption, that isshorter than a redemption term associated with the underlying hedgefund, the redemption term associated with the underlying hedge funddefining a required minimum period of time to elapse before aninvestment in the underlying hedge fund is eligible for redemption; aselling unit operable to sell said at least one of said feeder hedgefunds from the financial company to a qualified purchaser; a storageunit operable to record said selling of said at least one of said feederhedge funds to an account of the qualified purchaser; an exchanging unitoperable to exchange, on request by said purchaser to the financialcompany, said at least one of said feeder hedge funds with the financialcompany for at least one other feeder hedge fund within said program,wherein the exchanging is limited to a predetermined minimum amount andlimited by predetermined increments; an aggregating unit operable toaggregate the account with at least one other related account to computean aggregated total and determine whether the aggregated total at leastequals a predetermined minimum investment threshold, the minimuminvestment threshold being defined by an account manager.
 35. The systemof claim 34, wherein the exchanging unit is operable to calculate arespective exchange value for said at least one of said feeder hedgefunds and for said at least one other feeder hedge fund.
 36. The systemof claim 34, wherein the hedge fund provider unit is operable to provideat least one money market fund.
 37. The system of claim 34, furthercomprising: a subscriber unit operable to open a subscriber account by:receiving subscriber data, and completing an initial subscriptionagreement; and a processing unit operable to process subscribertransactions including investments in multiple ones of said plurality ofhedge funds using said subscriber data from said initial subscriptionagreement for each of said investments.
 38. The system of claim 37,wherein the processing unit is operable to process an executedtransaction form.
 39. The system of claim 38, wherein the processingunit is operable to process an executed abbreviated purchase form. 40.The system of claim 38, wherein the processing unit is operable toprocess an executed abbreviated purchase/exchange form.
 41. The systemof claim 38, wherein the processing unit is operable to process anexecuted abbreviated exchange form.
 42. The system of claim 34, furthercomprising a printer operable to prepare a consolidated report, saidreport providing performance data on more than one of said feeder funds.43. The system of claim 42, wherein the printer is operable to prepare aperiodic statement.
 44. The system of claim 34, wherein the feeder hedgefund provider is operable to provide the said feeder funds, each of saidfeeder hedge funds having redemption features substantially similar toeach other of said feeder hedge funds.
 45. The system of claim 34,wherein the exchanging unit is operable to move investments among saidfeeder hedge funds, without regard to a predetermined date relating toany of said feeder hedge funds.
 46. The system of claim 34, wherein thefeeder hedge fund provider is operable to establish for each said feederhedge fund a minimum investment amount lower than a minimum investmentamount for a hedge fund that (a) is outside said program and (b) hascharacteristics other than said minimum investment amount that aresubstantially identical to said characteristics.
 47. The system of claim34, further comprising a processing unit operable to process an initialprogram subscription for each account, said initial program subscriptioncomprising means for collecting data for use in investing in any of saidplurality of feeder hedge funds.
 48. The system of claim 34, wherein thefeeder hedge fund provider is operable to provide more than one shareclass in at least one said feeder hedge fund.
 49. The system of claim48, wherein the feeder hedge fund provider is operable to provide morethan one series in at least one of said more than one share class. 50.The system of claim 49, wherein the feeder hedge fund provider isoperable to provide more than one series in each of said more than oneshare class.
 51. The system of claim 48, wherein the feeder hedge fundprovider is operable to provide more than one share class in each ofsaid feeder hedge funds.
 52. The system of claim 51, wherein the feederhedge fund provider is operable to provide more than one series in atleast one of said more than one share class.
 53. The system of claim 52,wherein the feeder hedge fund provider is operable to provide more thanone series in each of said more than one share class.
 54. The system ofclaim 34, wherein the feeder hedge fund provider is operable to providemore than one series in at least one said feeder hedge fund.
 55. Thesystem of claim 54, wherein the feeder hedge fund provider is operableto provide more than one series in each of said feeder hedge funds. 56.The system of claim 34, wherein the exchanging unit is operable toprovide an exchange after an exchange delay that is shorter than aredemption delay in a hedge fund that (a) is outside said program and(b) has characteristics other than said redemption delay that aresubstantially identical to said characteristics of said feeder hedgefund.
 57. The system of claim 34, wherein the feeder hedge fund provideris operable to provide a plurality of feeder hedge funds using multipledifferent investment strategies.
 58. The system of claim 34, wherein thefeeder hedge fund provider is operable to provide a plurality of feederhedge funds with like rules.
 59. The system of claim 58, wherein thefeeder hedge fund provider is operable to provide a plurality of feederhedge funds with at least one of: (a) like redemption rules; (b) likesubscription rules; (c) like shared classes; (d) like reporting rules;(e) like customer account reporting; and (f) like customer accountrecord-keeping.
 60. The system of claim 58, further comprising acompiler unit operable to prepare a tabular compilation for saidplurality of hedge funds.
 61. The system of claim 60, wherein thecompiler unit is operable to compare features of more than one of saidplurality of hedge funds.
 62. The system of claim 34, wherein theselling unit is operable to provide on-line offering qualification. 63.The system of claim 62, wherein said on-line offering qualification isaccessible to a financial advisor.
 64. The system of claim 62, whereinthe selling unit is operable to provide said on-line offeringqualification by determining whether a potential investor meetspredetermined qualification criteria.
 65. The system of claim 34,wherein the exchanging unit is operable to process full payment ofredemption proceeds of said at least one of said feeder hedge fundsafter a redemption delay shorter than a redemption delay for a hedgefund that (a) is outside said program and (b) has characteristics otherthan said redemption delay that are substantially identical to saidcharacteristics of said feeder hedge funds.
 66. The system of claim 34further comprising a netting unit operable to net subscriptions withredemptions, including exchanges, of feeder hedge funds by saidpurchaser and at least one additional purchaser.
 67. A system foroffering a program of hedge funds, said system comprising: a feederhedge fund provider that provides a plurality of single-manager feederhedge funds sponsored by a financial company as part of said program,each of said feeder hedge funds having a value, wherein: at least one ofsaid feeder hedge funds sponsored by the financial company providesaccess to an underlying hedge fund without approval from the underlyinghedge fund, the underlying hedge fund having the capability to beilliquid on a daily basis; the at least one of said feeder hedge fundshas a minimum investment requirement that is less than a minimuminvestment requirement associated with the underlying hedge fund; andthe at least one of said feeder hedge funds having a redemption term,which defines a required minimum period of time to elapse before aninvestment in the at least one of said feeder hedge funds is eligiblefor redemption, that is shorter than a redemption term associated withthe underlying hedge fund, the redemption term associated with theunderlying hedge fund defining a required minimum period of time toelapse before an investment in the underlying hedge fund is eligible forredemption; a selling unit that sells said at least one of said feederhedge funds from the financial company to a qualified purchaser andrecords said selling of said at least one of said feeder hedge funds toan account of the qualified purchaser; an exchanging unit thatexchanges, on request by said purchaser to the financial company, saidat least one of said feeder hedge funds with the financial company forat least one other feeder hedge fund within said program, wherein theexchanging is limited to a predetermined minimum amount and limited bypredetermined increments; and an aggregation unit that aggregates theaccount with at least one other related account to compute an aggregatedtotal and determines whether the aggregated total at least equals apredetermined minimum investment threshold, the minimum investmentthreshold being defined by an account manager.
 68. The system of claim67, further comprising: an account creator that opens a subscriberaccount; a subscriber data receiving unit that feeds into saidsubscriber account opening unit; an initial subscription agreementcompletion unit that completes the initial subscription agreement usingdata from said subscriber data receiving unit; and a processing unitthat processes subscriber transactions including investments in multipleones of said plurality of hedge funds including by using said subscriberdata from said initial subscription agreement for each of saidinvestments.
 69. The system of claim 67, further comprising a printerthat prepares reports providing performance data on more than one ofsaid feeder funds.
 70. The system of claim 67, further comprising aprocessing unit that processes initial program subscriptions for eachaccount, said initial program subscriptions comprising data for use ininvesting in any of said plurality of feeder hedge funds.
 71. The systemof claim 67 further comprising a compiler unit that prepares a tabularcompilation for said plurality of hedge funds.
 72. The system of claim67 further comprising a netting unit that nets subscriptions withredemptions, including exchanges, of feeder hedge funds by saidpurchaser and at least one additional purchaser.
 73. A non-transitorymachine-readable data storage medium encoded with a set ofmachine-executable instructions for using a data processing system toperform a method for offering a program of hedge funds, said methodcomprising: providing a plurality of feeder hedge funds sponsored by afinancial company as part of said program, each of said feeder hedgefunds having a value, wherein at least one of said feeder hedge fundssponsored by the financial company provides access to an underlyinghedge fund, the underlying hedge fund having the capability to beilliquid on a daily basis, the at least one of said feeder hedge fundshaving a redemption term, which defines a required minimum period oftime to elapse before an investment in the at least one of said feederhedge funds is eligible for redemption, that is shorter than aredemption term associated with the underlying hedge fund, theredemption term associated with the underlying hedge fund defining arequired minimum period of time to elapse before an investment in theunderlying hedge fund is eligible for redemption; selling said at leastone of said feeder hedge funds from the financial company to a qualifiedpurchaser; and on request by said purchaser to the financial company,exchanging said at least one of said feeder hedge funds with thefinancial company for at least one other feeder hedge fund within saidprogram.
 74. The machine-readable data storage medium of claim 73,wherein said method further comprises: opening a subscriber account,said opening including: receiving subscriber data, and completing aninitial subscription agreement; and processing subscriber transactionsincluding investments in multiple ones of said plurality of hedge funds,said processing including using said subscriber data from said initialsubscription agreement for each of said investments.
 75. Themachine-readable data storage medium of claim 73, wherein said methodfurther comprises preparing a consolidated report, said report providingperformance data on more than one of said feeder funds.
 76. Themachine-readable data storage medium of claim 73, wherein said methodfurther comprises processing an initial program subscription for eachaccount, said initial program subscription comprising collecting datafor use in investing in any of said plurality of feeder hedge funds. 77.The machine-readable data storage medium of claim 73, wherein saidmethod further comprises: establishing an account for at least one saidqualified purchaser; and aggregating said account with at least oneother related account to compute an aggregated total.
 78. Themachine-readable data storage medium of claim 77, wherein said methodfurther comprises determining whether said aggregated total at leastequals a predetermined minimum investment threshold.
 79. Themachine-readable data storage medium of claim 73, wherein said methodfurther comprises preparing a tabular compilation for said plurality ofhedge funds.
 80. The machine-readable data storage medium of claim 73,wherein said method further comprises netting subscriptions withredemptions, including exchanges, of feeder hedge funds by saidpurchaser and at least one additional purchaser.
 81. Themachine-readable data storage medium of any one of claims 73, 74, 75,76, 77, 78, 79 and 80, where said data storage medium is magnetic. 82.The magnetic machine-readable data storage medium of claim 81, wheresaid data storage medium is a floppy diskette.
 83. The magneticmachine-readable data storage medium of claim 81, where said datastorage medium is a hard disk.
 84. The machine-readable data storagemedium of any one of claims 73, 74, 75, 76, 77, 78, 79 and 80, wheresaid data storage medium is optically readable.
 85. The opticallyreadable storage medium of claim 84, where said data storage medium isone of (a) a CD-ROM, (b) a CD-R, (c) a CD-RW, (d) a DVD-ROM, (e) a DVDR, (f) DVD-RW, and (g) a DVD-RAM.
 86. The optically readable datastorage medium of claim 84, where said data storage medium is amagneto-optical disk.